Gold endured an exceptionally turbulent stretch last week, surging to a record high above $5,500 an ounce before retreating sharply in a selloff that only intensified over the weekend. The early part of the week was fuelled by strong momentum and speculative flows, but that optimism flipped suddenly when reports emerged that President Trump was considering Kevin Warsh for the role of Federal Reserve (Fed) Chair. Warsh, a former governor, is widely viewed as a more hawkish candidate, and the news around his possible nomination sparked a jump in the dollar, adding further pressure to an already overstretched gold market. By Friday and into the weekend, the precious metal suffered its steepest decline in more than a decade, slumping by 7.0–10.0% across some markets in a dramatic reversal that underscored just how fragile the rally had become. Silver mirrored the move, also coming under heavy pressure as the broader precious metals space sold off sharply.

Returning to the Fed, it held its latest policy meeting last week, leaving interest rates unchanged in the 3.50–3.75% range, as widely expected (1). The central bank acknowledged that inflation remains “somewhat elevated” but noted clearer signs of stabilisation in the labour market, with Chair Jerome Powell signalling that current policy settings are not considered restrictive for the economy. The S&P 500, which briefly pushed above the 7,000 level, ultimately ended the week +0.3% higher in dollar terms, with large‑cap stocks outperforming their smaller‑cap peers. Treasury markets reacted in a more measured fashion, with yields across the curve drifting only modestly higher.

Across Europe, equity performance was mixed: German and French indices lagged, while Italian equities enjoyed strong momentum. The FTSE 100 also advanced, rising +0.8%, supported by solid gains in the oil majors as crude prices moved higher. In Asia, sentiment was similarly uneven. Chinese equities, as measured by the Shanghai Composite, slipped -0.4% (in renminbi), while Japan’s Nikkei 225 fell -1.0% (in yen), weighed down by weakness across its technology names.

(Source 1: Federal Reserve – Federal Open Market Committee Meeting, 26-27th January 2026)

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